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CONTACTS:
FINANCIAL/INVESTORS
Frank Pekny (City National) 310-888-6700
Ian Campbell (Abernathy MacGregor Group) 213-630-6550
MEDIA
Kim George (City National) 213-833-4715
Denis Wolcott (Stoorza Communications) 213/891-2822
FOR IMMEDIATE RELEASE
CITY NATIONAL CORPORATION REPORTS RECORD NET INCOME OF $131.7
MILLION AND EPS OF $2.72 FOR THE YEAR 2000
TOTAL ASSETS EXCEEDED $9.0 BILLION AT DECEMBER 31, 2000
NET INCOME FOR THE FOURTH QUARTER ROSE 18 PERCENT TO $33.0 MILLION,
OR $0.68 PER SHARE, FROM THE 1999 FOURTH QUARTER
LOS ANGELES, JAN. 17, 2001 -- City National Corporation (NYSE: CYN), parent
corporation of wholly owned City National Bank, today reported its fifth
consecutive year of record net income. Net income totaled $131.7 million in
2000, a 22 percent increase from net income of $108.1 million in 1999. Cash
net income, which excludes the amortization of core deposit intangibles and
goodwill from acquisitions, increased 26 percent to $145.7 million in 2000,
compared with $115.4 million in 1999.
Net income per diluted common share of $2.72 increased 18 percent, compared
with $2.30 per share in 1999. Cash net income per diluted common share rose
22 percent to $3.01, compared with $2.46 per diluted common share in 1999.
These results include the integration of The Pacific Bank, N.A., acquired in
February 2000 in a purchase transaction, and American Pacific State Bank,
acquired in August 1999, also in a purchase transaction.
City National Corporation also reported net income of $33.0 million for the
fourth quarter of 2000, an increase of 18 percent over net income of $27.9
million for the fourth quarter of 1999. Cash net income for the fourth
quarter of 2000 rose 21 percent to $36.8 million, compared with $30.4 million
for the fourth quarter of 1999.
1
Net income per diluted common share increased 13 percent to $0.68 for the
fourth quarter of 2000, compared with net income per diluted common share of
$0.60 for the fourth quarter of 1999. Cash net income per diluted common
share of $0.76 for the fourth quarter of 2000 rose 17 percent from $0.65 for
the fourth quarter of 1999.
"City National reached many major milestones in 2000," said Russell
Goldsmith, Chief Executive Officer. "For the first time, the bank exceeded
$9.0 billion in assets, earned more than $130.0 million and grew deposits and
loans substantially to $7.4 billion and $6.5 billion, respectively. In
addition, assets under administration increased to more than $18.0 billion,
and noninterest income crossed the $100.0 million plateau.
"Other firsts this year included our expansion into the San Francisco Bay
Area and our first purchase of an asset management firm through acquisitions
of The Pacific Bank and Reed, Conner & Birdwell, respectively.
"City National's entire talented team worked together to achieve our
financial goals, giving us our fifth consecutive year of record earnings and
our sixth consecutive year of double-digit net income growth," added
Goldsmith. "We did this even while dramatically reducing our portfolio of
syndicated loans, maintaining strong credit reserves, and investing
significantly in our capabilities and facilities for the future.
"With more than 2000 colleagues, 48 offices in California, outstanding
technology and products, and our continued commitment to deliver California's
premier relationship-driven private and business banking to entrepreneurs,
professionals, investors and small- to mid-sized businesses, I am confident
City National is well positioned for the year ahead," Goldsmith said.
RETURN ON ASSETS/RETURN ON EQUITY
The corporation's return on average assets in 2000 was 1.56 percent, compared
with 1.67 percent in 1999. The decrease reflects the impact on net income of
amortizing a larger amount of goodwill associated with two recent bank
acquisitions. The return on average shareholders' equity rose to 19.72
percent, compared with 19.16 percent for the prior year. For the fourth
quarter of 2000, the return on average assets was 1.50 percent and the return
on average shareholders' equity was 18.29 percent, compared with 1.55 percent
and 19.40 percent, respectively, for the prior year quarter. The lower return
on average shareholders' equity reflected a reduction in unrealized losses on
available-for-sale securities that increased shareholders' equity during the
quarter.
On a cash basis (which excludes goodwill and the after-tax impact of
nonqualifying core deposit intangibles from average assets and average
shareholders' equity), the return on average assets in 2000 was 1.76 percent,
compared with 1.80 percent in 1999. The return on average shareholders'
equity on a cash basis rose to 29.17 percent, compared with 23.98 percent for
the prior year. For the 2000 fourth quarter on a cash basis, the return on
average assets was 1.71 percent and the return on average shareholders'
equity was 26.75
2
percent, compared with 1.72 percent and 26.71 percent, respectively, for the
1999 fourth quarter.
Management expects continued strong returns going forward and net income per
diluted common share for 2001 will be approximately 8 percent to 11 percent
higher than net income per diluted common share for 2000. These expectations
do not reflect the potential impact to the corporation of the tentative
decision of the Financial Accounting Standards Board to discontinue goodwill
amortization. Management believes that this change in the treatment of
goodwill, if adopted as proposed, will have a positive impact on the
corporation's future results of operations. In 2000, the amortization of
goodwill reduced net income per diluted common share by $0.22.
ASSETS
Total assets at December 31, 2000 were $9.1 billion, compared with $7.2
billion at December 31, 1999, and $8.9 billion at September 30, 2000. Total
average assets reached $8.4 billion in 2000, an increase of 30 percent over
the $6.5 billion in average assets for 1999.
LOANS
Average loans rose to $6.2 billion for the year 2000, an increase of 29
percent over the prior year. Year-over-year loan growth was driven primarily
by increases in commercial loans and real estate commercial mortgage loans.
Compared with 1999, commercial loan average balances rose 25 percent to $3.2
billion from $2.6 billion. The commercial loan portfolio does not contain any
direct energy-related borrowings and only a limited amount of technology-related
borrowings--approximately two thirds of one percent of the commercial loan
portfolio. Real estate commercial mortgage loan averages rose 57 percent to
$1.3 billion from $0.9 billion, compared with the prior year. All other loan
categories also contributed to the increase in average loan growth over the
prior year. For basis of presentation, management has divided the
corporation's commercial loan portfolio into relationship loans and
syndicated non-relationship loans. Syndicated non-relationship loans are
loans agented by others where the corporation has limited direct access to
the borrower and provides no other banking products or services.
Total loans at December 31, 2000 were $6.5 billion, compared with $5.5
billion at December 31, 1999 and $6.4 billion at September 30, 2000. The net
change from September 30, 2000 included a $243.2 million, or 4 percent,
increase in relationship loans, partially offset by a $142.8 million decrease
in syndicated non-relationship loans. The reduction in syndicated
non-relationship loans reflects management's decision to reduce the higher
credit risk exposure associated with that portfolio. At December 31, 2000,
syndicated non-relationship loans had decreased to $191.8 million,
representing less than 3 percent of the loan portfolio. At December 31, 1999,
syndicated non-relationship loans totaled $536.8 million, or 10 percent of
the loan portfolio. The
3
reduction included the transfer of $132.0 million of gross loan balances to
available-for-sale loans during the fourth quarter, of which one credit for
$7.2 million remains in other assets as of December 31, 2000. The average
outstanding loan balance in the syndicated non-relationship portfolio at
December 31, 2000 was $3.1 million, which represents just over half of the
average commitment amount.
Management anticipates average relationship loan growth will be in the 9
percent to 13 percent range in 2001, reflecting its expectation that the
growth in the California economy will slow from the strong growth experienced
in recent years but will still grow at a moderate pace.
DEPOSITS
Average deposits rose during the year 2000 to $6.3 billion, an increase of 32
percent over 1999. During the fourth quarter of 2000, average deposits
increased 6 percent to $6.9 billion, compared with $6.5 billion for the 2000
third quarter.
During the year 2000, average core deposits rose to $5.0 billion, an increase
of 28 percent over 1999. Core deposits represented 78 percent of the total
average deposit base for the year. Fourth quarter 2000 average core deposits
of $5.2 billion represented a 5 percent increase over the previous quarter's
average.
Deposits totaled $7.4 billion at December 31, 2000, compared with $5.7
billion at December 31, 1999, and $6.9 billion at September 30, 2000.
Average deposit growth in 2001, compared to 2000, is expected to be in the 8
percent to 12 percent range.
NET INTEREST INCOME
As a result of strong loan and core deposit growth and a higher average prime
rate compared with the prior year, net interest income on a fully
taxable-equivalent basis rose 26 percent to $419.1 million in 2000, compared
with $332.7 million for 1999. Interest income recovered on nonaccrual and
charged-off loans was $4.0 million in 2000, compared with $5.3 million for
1999. For the fourth quarter of 2000, net interest income on a fully
taxable-equivalent basis totaled $108.7 million, an increase of 21 percent
over $89.9 million for the same quarter of 1999.
The fully taxable-equivalent net interest margin in 2000 was 5.44 percent,
compared with 5.56 percent for 1999. The decrease was attributable to an
increase in the cost of funds and a shift in the deposit mix. This decrease
was partially offset by higher yields on earning assets.
4
For the fourth quarter of 2000, the fully taxable-equivalent net interest
margin was 5.41 percent, compared with 5.32 percent for the 2000 third
quarter. This increase was primarily due to the strong growth in demand
deposits, a seasonal occurrence.
Management expects its net interest margin for 2001 to decrease modestly from
2000.
NONINTEREST INCOME
Noninterest income continued its strong, across-the-board growth, with
recurring noninterest income increasing 31 percent to $106.4 million in 2000
over the $81.4 million reported for 1999. Recurring noninterest income for
the fourth quarter of 2000 increased 25 percent to $28.8 million, compared
with $23.1 million for the year-earlier quarter, and increased 8 percent from
$26.8 million for the third quarter of 2000.
All categories of recurring noninterest income were higher year-over-year and
quarter-over-quarter, reflecting City National's continued emphasis on
growing fee income. Investment services and trust fees rose as a result of a
strong cross-selling program to existing clients, as well as direct-sales
activities focused on new clients by City National Investments (CNI), a
division of City National Bank.
Assets under administration increased to $18.0 billion at December 31, 2000,
which included $6.7 billion under management, compared with $14.1 billion and
$4.4 billion, respectively, at December 31, 1999, and $16.7 billion and $5.3
billion at September 30, 2000. Assets under management at December 31, 2000
included $1.1 billion from the purchase of Reed, Conner & Birdwell, Inc.,
completed as of the close of business on December 29, 2000. The remaining
increase in assets under management over the year-earlier period is primarily
attributable to the CNI Charter Funds introduced in 1999 and 2000.
International services income rose significantly as a result of increased
foreign-exchange fees and, to a lesser extent, an increase in fee income
associated with letters of credit and standby letters of credit.
Gains on the sale of assets and securities amounted to $3.1 million and $1.1
million for the year and fourth quarter of 2000, respectively, compared with
gains of $5.8 million and $0.1 million for the same periods a year earlier.
Management expects growth in noninterest income to be in the 15 percent to 20
percent range during 2001.
NONINTEREST EXPENSE
Noninterest expense was $294.8 million in 2000, an increase of $53.0 million
compared with $241.8 million for 1999. The year-over-year increase in
expenses was primarily the
5
result of the corporation's growth, including expenses related to
acquisitions--additional offices, new colleagues and the amortization of
goodwill and core deposit intangibles. Noninterest expense in the fourth
quarter of 2000 was $75.6 million, an increase of $8.9 million, compared with
$66.7 million for the year-earlier quarter and an increase of $1.6 million,
compared with $74.0 million for the third quarter of 2000.
The corporation's cash efficiency ratio for 2000 improved to 52.61 percent
from 55.37 percent in 1999. The 5 percent improvement is due to increased
revenues and management's continued emphasis on enhancing efficiency and
productivity.
Management currently anticipates that 2001 noninterest expense will increase
in the 5 percent to 8 percent range, excluding the impact of any change in
the accounting rules for goodwill amortization.
INCOME TAXES
The 2000 effective tax rate was 34.1 percent, compared with 35.4 percent for
1999. The lower tax rate is due primarily to the impact of the formation of a
registered investment company subsidiary. The long-term plan for the
registered investment company continues under review. Depending on the
outcome of the review and other factors, management anticipates its effective
tax rate may be between 35.5 percent and 37.0 percent in 2001.
CREDIT QUALITY
Net loan charge-offs were $30.1 million and $4.7 million for the years 2000
and 1999, respectively. Net loan charge-offs for the fourth quarter of 2000
were $14.3 million, including $5.2 million related to the $132.0 million of
syndicated non-relationship loan balances transferred to available-for-sale
assets. This compares with $4.9 million in the fourth quarter of 1999 and
$8.3 million for the 2000 third quarter.
Relationship loan net charge-offs were $11.9 million for the year and $5.0
million for the fourth quarter of 2000, compared with net recoveries in the
respective prior year periods. For the third quarter of 2000, relationship
loan net charge-offs were $3.6 million. For the full year 2000, net
charge-offs related to syndicated non-relationship loans accounted for $18.2
million, or 60 percent of net charge-offs. Fourth quarter syndicated
non-relationship loan net charge-offs were $9.2 million, including the $5.2
million discussed above, compared with $8.1 million in the fourth quarter of
1999 and $4.7 million for the third quarter of 2000.
As a percentage of average loans, net charge-offs were 0.48 percent and 0.10
percent for the years 2000 and 1999, respectively. Relationship loan net
charge-offs were 0.21 percent of average relationship loans outstanding for
2000.
6
Total nonperforming assets (nonaccrual loans and ORE) were $62.5 million, or
0.96 percent of total loans and ORE at December 31, 2000, compared with $26.7
million, or 0.49 percent, at December 31, 1999 and $47.0 million, or 0.73
percent at September 30, 2000.
Total nonperforming relationship assets were $39.5 million, or 0.62 percent,
of total relationship loans and ORE at December 31, 2000, compared with $26.7
million, or 0.54 percent, at December 31, 1999 and $29.9 million, or 0.49
percent at September 30, 2000. While the corporation has experienced a
moderate increase in relationship nonaccrual loans, the nonaccrual loan
portfolio does not contain any concentration of credits within a specific
industry sector. Total syndicated non-relationship loans on nonaccrual status
were $23.0 million at December 31, 2000 and consisted of five borrowers,
three of which were added in the fourth quarter.
City National recorded a provision for credit losses of $21.5 million for
2000, compared with no provision in the prior year. The provision for credit
losses in the fourth quarter was $10.5 million. The provision for credit
losses primarily reflects the levels of net loan charge-offs and nonaccrual
loans, as well as management's ongoing assessment of the credit quality of
the portfolio and the 19 percent year-over-year growth of the loan portfolio.
The amount of the provision for credit losses to be taken in 2001 will
reflect management's assessment of the above factors, as well as the economic
environment at each reporting date. Based on the current assessment of these
factors, management anticipates that a provision for credit losses of
approximately $30 million to $45 million may be required in 2001.
The allowance for credit losses at December 31, 2000 totaled $135.4 million,
or 2.07 percent of outstanding loans. This compares with an allowance of
$134.1 million, or 2.44 percent of outstanding loans, at December 31, 1999,
and an allowance of $139.2 million, or 2.17 percent of outstanding loans, at
September 30, 2000. The allowance for credit losses as a percentage of
nonaccrual loans was 218 percent at December 31, 2000, compared with 530
percent at December 31, 1999 and 297 percent at September 30, 2000.
Management believes the allowance for credit losses is adequate to cover
risks inherent in the portfolio at December 31, 2000.
CAPITAL LEVELS
Total risk-based capital and Tier 1 risk-based capital ratios at December 31,
2000 were 10.85 percent and 7.84 percent, compared with the capital ratios of
10 percent and 6 percent, respectively, required for an institution to be
classified as "well-capitalized." The corporation's Tier 1 leverage ratio of
6.49 percent exceeded the regulatory minimum of 4 percent required for a
"well-capitalized" institution. Total risk-based capital, Tier 1 risk-based
capital and the Tier 1 leverage ratios were 10.88 percent, 7.85 percent and
6.41 percent, respectively, at September 30, 2000.
7
STOCK REPURCHASE
The stock buyback program of one million common shares announced on July 29,
1999 was completed on October 25, 2000 at a cost of $32.1 million. On October
26, 2000, a new one million-share stock buyback program of the corporation's
common stock was announced. Under this program, 201,600 shares have been
repurchased at a cost of $6.6 million as of December 31, 2000. Shares
totaling 308,270 were used in the purchase of Reed, Conner & Birdwell, Inc.
The remaining shares purchased under the buyback programs will be reissued
for acquisitions, upon the exercise of stock options, and for other general
corporate purposes. Treasury shares at December 31, 2000 totaled 155,335
shares.
ABOUT CITY NATIONAL
City National Corporation is a publicly owned corporation with $9.1 billion
in total assets whose stock is traded on the New York Stock Exchange under
the symbol "CYN." The corporation's wholly owned subsidiary, City National
Bank, is California's premier private and business bank. City National Bank,
which provides banking, trust and investment services, has 48 California
offices located throughout Los Angeles, Orange, Riverside, San Bernardino,
San Diego, San Francisco, San Mateo, Santa Clara and Ventura counties.
For more information about the corporation, the corporation's Web page is at
http://www.cnb.com. In addition, City National Corporation is scheduled to
present at Salomon Smith Barney's Financial Services Conference at 3:45 p.m.
EST on Tuesday January 23, 2001. The presentation will be available via audio
webcast and a link will be posted on the corporation's Web site.
This news release contains forward-looking statements about the corporation
for which the corporation claims the protection of the safe harbor contained
in the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on management's knowledge and belief as
of today and include information concerning the corporation's possible or
assumed future financial condition, and its results of operations and
business. Forward-looking statements are subject to risks and uncertainties.
A number of factors, some of which are beyond the corporation's ability to
control or predict, could cause future results to differ materially from
those contemplated by such forward-looking statements. These factors include
(1) an economic slowdown in California attributable to energy supply issues,
a possible strike by writers and actors, or any other unforeseen events, (2)
changes in interest rates, (3) significant changes in banking laws or
regulations, (4) increased competition in the corporation's market, (5)
higher-than-expected credit losses and (6) possible changes in the plans for
the registered investment company subsidiary.
8
For a more complete discussion of these risks and uncertainties, see the
corporation's Quarterly Report on Form 10-Q for the quarter ended September
30, 2000, and particularly the section of Management's Discussion and
Analysis therein titled "Cautionary Statement for Purposes of the 'Safe
Harbor' Provisions of the Private Securities Litigation Reform Act of 1995."
9
Earnings Release
January 17, 2001
Page 10
CITY NATIONAL CORPORATION
- -------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET (UNAUDITED) (DOLLARS IN THOUSANDS, EXCEPT PER
SHARE AMOUNT)
- -------------------------------------------------------------------------------
DECEMBER 31,
----------------------------------------
2000 1999 % CHANGE
----------- ---------- ----------
Assets
Cash and due from banks $ 386,814 $ 233,178 66
Securities 1,593,922 1,129,806 41
Federal funds sold 165,000 57,000 189
Loans (net of allowance for credit
losses of $135,435 and $134,077) 6,391,710 5,356,592 19
Other assets 559,223 437,043 28
----------- ----------
Total assets $ 9,096,669 $7,213,619 26
=========== ==========
Liabilities and Shareholders' Equity
Noninterest-bearing deposits $ 3,276,203 $2,448,916 34
Interest-bearing deposits 4,132,467 3,220,493 28
----------- ----------
Total deposits 7,408,670 5,669,409 31
Federal funds purchased and securities sold
under repurchase agreements 139,841 295,487 (53)
Other short-term borrowed funds 315,125 296,739 6
Subordinated debt 123,641 123,453 -
Other long-term debt 205,000 180,000 14
Other liabilities 160,744 76,885 109
----------- ----------
Total liabilities 8,353,021 6,641,973 26
Shareholders' equity 743,648 571,646 30
----------- ----------
Total liabilities and shareholders' equity $ 9,096,669 $7,213,619 26
=========== ==========
Book value per share $ 15.61 $12.58 24
Number of shares at period end 47,630,010 45,456,743 5
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) (DOLLARS IN THOUSANDS, EXCEPT
PER SHARE AMOUNT)
- -------------------------------------------------------------------------------
FOR THE THREE MONTHS ENDED FOR THE TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------------------------------- ---------------------------------------
2000 1999 % CHANGE 2000 1999 % CHANGE
------------ ----------- --------- ------------ ----------- ---------
Interest income $ 169,218 $ 129,435 31 $ 646,288 $ 470,446 37
Interest expense (63,594) (42,524) 50 (239,772) (148,441) 62
------------ ----------- ------------ -----------
Net interest income 105,624 86,911 22 406,516 322,005 26
Provision for credit losses (10,500) - N/M (21,500) - N/M
------------ ----------- ------------ -----------
Net interest income after provision
for credit losses 95,124 86,911 9 385,016 322,005 20
Noninterest income 29,929 23,215 29 109,484 87,212 26
Noninterest expense (75,626) (66,699) 13 (294,769) (241,803) 22
------------ ----------- ------------ -----------
Income before taxes 49,427 43,427 14 199,731 167,414 19
Income taxes (16,380) (15,510) 6 (68,070) (59,307) 15
------------ ----------- ------------ -----------
Net income $ 33,047 $ 27,917 18 $ 131,661 $ 108,107 22
============ =========== ============ ===========
Net income per share, basic $ 0.70 $ 0.61 15 $ 2.79 $ 2.36 18
============ =========== ============ ===========
Net income per share, diluted $ 0.68 $ 0.60 13 $ 2.72 $ 2.30 18
============ =========== ============ ===========
Dividends paid per share $ 0.18 $ 0.17 9 $ 0.70 $ 0.66 6
============ =========== ============ ===========
Cash net income $ 36,814 $ 30,411 21 $ 145,721 $ 115,358 26
============ =========== ============ ===========
Cash net income per share, basic $ 0.78 $ 0.67 16 $ 3.09 $ 2.53 22
============ =========== ============ ===========
Cash net income per share, diluted $ 0.76 $ 0.65 17 $ 3.01 $ 2.46 22
============ =========== ============ ===========
Shares used to compute per share
net income, basic 47,434,212 45,428,367 47,178,093 45,682,714
Shares used to compute per share
net income, diluted 48,518,548 46,605,553 48,393,436 46,938,130
Earnings Release
January 17, 2001
Page 11
CITY NATIONAL CORPORATION
- ------------------------------------------------------------------------------
SELECTED FINANCIAL INFORMATION (UNAUDITED) (DOLLARS IN THOUSANDS)
- ------------------------------------------------------------------------------
PERIOD END DECEMBER 31,
-----------------------------------------------
2000 1999 % CHANGE
--------------- -------------- -------------
Loans
Commercial (a)
Relationship $3,056,464 $2,333,627 31
Syndicated non-relationship 191,789 536,811 (64)
--------------- --------------
3,248,253 2,870,438 13
Single family first trust deed 1,273,711 1,173,334 9
Real estate commercial mortgage 1,479,862 1,042,123 42
Real estate construction 452,301 344,870 31
Installment 73,018 59,904 22
--------------- --------------
Total loans $6,527,145 $5,490,669 19
=============== ==============
(a) Commercial relationship loans were $2,920,518 and syndicated non-relationship loans were $334,626 at September 30, 2000.
Deposits
Noninterest bearing $3,276,203 $2,448,916 34
Interest-bearing, core 2,456,080 2,051,799 20
--------------- --------------
Total core deposits 5,732,283 4,500,715 27
Time deposits - $100,000 and over 1,676,387 1,168,694 43
--------------- --------------
Total deposits $7,408,670 $5,669,409 31
=============== ==============
Credit Quality
Nonaccrual loans and ORE (b)
Relationship loans $38,974 $25,288 54
Syndicated non-relationship loans 23,012 - N/M
--------------- --------------
61,986 25,288 145
ORE 522 1,413 (63)
--------------- --------------
Total nonaccrual loans and ORE $62,508 $26,701 134
=============== ==============
Relationship nonaccrual loans and ORE to total
relationship loans and ORE to total 0.62 0.54 15
Total nonaccrual loans and ORE to total loans and ORE 0.96 0.49 96
Loans past due 90 days or more on accrual status $5,924 $4,033 47
=============== ==============
Restructured loans on accrual status $829 $2,707 (69)
=============== ==============
(b) Nonaccrual loans were $46,883 at September 30, 2000 including $29,717 of relationship loans and $17,166
of syndicated non-relationship loans.
FOR THE THREE MONTHS ENDED FOR THE TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
---------------------------------- -------------------------------
ALLOWANCE FOR CREDIT LOSSES 2000 1999 % CHANGE 2000 1999 % CHANGE
--------- --------- -------- --------- --------- --------
Beginning balance $ 139,195 $ 139,015 - $ 134,077 $ 135,339 (1)
Additions from acquisitions - - - 9,927 3,415 191
Provision for credit losses 10,500 - N/M 21,500 - N/M
Charge-offs (c)
Relationship loans (8,168) (1,333) 513 (23,409) (11,435) 105
Syndicated non-relationship loans (9,245) (d) (8,093) 14 (18,167) (8,093) 124
--------- ---------- --------- ---------
(17,413) (9,426) 85 (41,576) (19,528) 113
Recoveries 3,153 4,488 (30) 11,507 14,851 (23)
---------- ---------- --------- ---------
Net charge-offs (14,260) (4,938) 189 (30,069) (4,677) 543
---------- ---------- --------- ---------
Ending Balance $ 135,435 $ 134,077 1 $ 135,435 $ 134,077 1
========== ========== ========= =========
Net relationship (charge-offs) recoveries
to average relationship loans (annualized) (0.32) % 0.26 % N/M (0.21) % 0.80 % N/M
Total net charge-offs to average loans (annualized) (0.88) (0.37) 138 (0.48) (0.10) 380
Allowance for credit losses to total loans 2.07 2.44 (15)
Allowance for credit losses to nonaccrual loans 218.49 530.20 (59)
(c) Charge-offs in the third quarter 2000 were $5,060 in relationship loans and $4,690 in syndicated non-relationship loans.
(d) Includes $5,155 relating to the transfer to available-for-sale of $132,000 of syndicated non-relationship loans.
Earnings Release
January 17, 2001
Page 12
CITY NATIONAL CORPORATION
- -------------------------------------------------------------------------------
SELECTED FINANCIAL INFORMATION (UNAUDITED) (DOLLARS IN THOUSANDS EXCEPT PER
SHARE AMOUNTS)
- -------------------------------------------------------------------------------
FOR THE THREE MONTHS ENDED FOR THE TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------------------------------------- -----------------------------------------
2000 1999 % CHANGE 2000 1999 % CHANGE
---------------- --------------- --------- --------------- -------------- --------
AVERAGE BALANCES
Loans
Commercial $3,230,460 $2,743,592 $ 3,189,457 $ 2,560,701 25
Single family first trust deed 1,261,191 1,148,876 10 1,235,106 1,069,522 15
Real estate commercial mortgage 1,449,840 1,018,816 42 1,336,443 851,396 57
Real estate construction 425,401 329,146 29 409,281 288,084 42
Installment 71,550 59,854 20 66,047 52,551 26
---------------- --------------- --------------- --------------
Total loans $6,438,442 $5,300,284 $6,236,334 $4,822,254 29
================ =============== =============== ==============
Securities
Interest-earning assets $ 1,513,242 $ 1,155,776 31 $ 1,416,252 $1,118,127 27
Assets 7,996,396 6,526,811 23 7,698,884 5,985,018 29
Core deposits 8,752,031 7,132,771 23 8,426,129 6,488,834 30
Deposits 5,231,662 4,325,587 21 4,957,440 3,881,108 28
Shareholders' equity 6,876,279 5,508,263 25 6,334,846 4,809,800 32
718,707 570,932 26 667,618 564,091 18
NONINTEREST INCOME
Service charges on deposit accounts $ 5,739 $ 5,417 6 $ 22,933 $ 18,113 27
Investment services 7,245 5,350 35 26,409 19,763 34
Trust fees 5,224 4,752 10 20,870 18,059 16
International services 3,958 3,085 28 14,982 9,950 51
Bank-owned life insurance 654 614 7 2,578 2,268 14
Other 6,008 3,923 53 18,651 13,246 41
---------------- --------------- --------------- --------------
Subtotal - recurring 28,828 23,141 25 106,423 81,399 31
Gain (loss) on sale of loans and assets 6 393 (98) (71) 2,117 (103)
Gain (loss) on sale of securities 1,095 (319) 443 3,132 3,696 (15)
---------------- --------------- --------------- --------------
Total $ 29,929 $ 23,215 $ 109,484 $ 87,212
================ =============== =============== ==============
NONINTEREST EXPENSE
Salaries and other employee benefits $ 38,838 $ 34,918 $ 159,782 $ 133,935
---------------- --------------- --------------- --------------
All Other
Professional 6,338 5,993 6 23,076 20,811 11
Net occupancy of premises 6,632 6,230 6 24,415 18,955 29
Information services 3,699 3,604 3 14,064 12,267 15
Marketing and advertising 4,132 2,871 44 12,959 10,444 24
Depreciation 3,553 3,088 15 13,037 11,242 16
Office services 2,580 2,229 16 9,724 8,212 18
Amortization of goodwill 2,843 1,710 66 10,462 4,592 128
Amortization of core deposit intangibles 1,595 1,342 19 6,205 4,717 32
Equipment 723 667 8 2,462 2,213 11
Acquisition integration (14) 52 N/M 1,309 1,161 13
Other operating 4,707 3,995 18 17,274 13,254 30
---------------- --------------- --------------- --------------
Total all other 36,788 31,781 16 134,987 107,868 25
---------------- --------------- --------------- --------------
Total $ 75,626 $ 66,699 13 $ 294,769 $ 241,803 22
================ =============== =============== ==============
SELECTED RATIOS
For the Period
Return on average assets 1.50 % 1.55 % (3) 1.56 % 1.67 % (7)
Return on average shareholders' equity 18.29 19.40 (6) 19.72 19.16 3
Net interest margin 5.41 5.46 (1) 5.44 5.56 (2)
Efficiency ratio 54.56 58.81 (7) 55.76 57.58 (3)
Dividend payout ratio 25.14 26.69 (6) 24.95 27.91 (11)
Cash return on average assets 1.71 1.72 (1) 1.76 1.80 (2)
Cash return on average shareholders' equity 26.75 26.71 - 29.17 23.98 22
Cash efficiency ratio 51.36 56.11 (8) 52.61 55.37 (5)
Period End
Tier 1 risk-based capital ratio 7.84 7.88 (1)
Total risk-based capital ratio 10.85 11.21 (3)
Tier 1 leverage ratio 6.49 6.73 (4)
(Released to Business Wire this date)